Avinode Takes Charter Closer to Client as Market Still Fluctuates

Online charter portal Avinode (Booth No. C7818) is introducing a new suite of mobile applications for iPhones and iPads to put real-time aircraft availability data in the palm of the user’s hand. The Sweden-based group developed the apps so that charter operators and brokers can make them available to their clients, sparing them the chore of doing the complex development work themselves. They include charter search and request tools that the brokers and operators can use, with or without empty-leg search capability, as well as a stand-alone empty-leg sales tool.

“We believe that finding a private jet should be as simple and flexible as traveling in one,” explained Per Marthinsson, managing director for Avinode Americas. “So we designed a suite of apps that would allow our marketplace members to give their clients easy access to available charter aircraft with real-time price and availability information pulled straight from the Avinode marketplace.”

International charter brokering group Air Partner International has been one of the first Avinode clients to use the app. It has taken advantage of the white-label design to brand it as its own application.

Avinode keeps tabs on the state of the market by generating forward-looking indices showing projected demand and prices over the coming 30-day period, calculated from between 80,000 and 150,000 flight requests for up to 3,000 aircraft processed through its online portal each month. This includes 1,700 logged on a real-time availability feed, while operators manually log the remaining 1,300.

Some Bright Spots

Figures produced in September showed the demand index averaging 15 to 25 points higher than the equivalent periods in 2010. Meanwhile, flight-hour prices are still below levels charged prior to the 2008 financial crisis and, while they have generally recovered over the past 12 months, those gains are being undermined by rising operating costs–most notably fuel.

Avinode business intelligence manager Magnus Henriksson pointed to some bright spots in the 2011 charter recovery, particularly the Russian market. “We’ve seen the Russian Bear waking up during the spring, driving a strong demand for executive charter to and from the Moscow region,” he commented. The company also has continued to see growth in Eastern Europe and in new markets such as Turkey.

Other demand spikes seen this year were clearly prompted by the so-called Arab Spring political upheaval in the North African states of Tunisia, Egypt and Libya. The Avinode system has revealed charter bookings clearly related to movements of people out of the country at times of heightened tensions.

The Avinode database has also highlighted tangibly different trends in charter markets around the world. For instance, as the U.S. economy softened a few years ago there was a move from chartering heavier jets to the super-midsize and midsize categories. “The market [for business aircraft use] has been far more established in the U.S. since the 1970s, so consumers there try to avoid the need to stop flying,” said Henriksson. “Instead, they just try to fly cheaper, and so while they still need a certain amount of range, they have been downgrading from the heavy iron.”

In the U.S., according to Avinode, the most popular jets for charter so far this year have been Bombardier’s Learjet 60 and 35, as well as the Gulfstream GIV. Henriksson maintained that the U.S. market has been “bouncing back slowly but surely,” with supply of aircraft once again tightening around peak periods.

Europe Bucks the Trend

Though buffeted by the same economic storm, charter trends in Europe have been moving in the opposite direction. Europeans have displayed no such pragmatism in altering their charter habits to avoid having to go back to airline service. This has seen the light-jet sector hit badly as those who can no longer justify the cost simply drop out of the market. At the same time, presumably because the super-rich have tended to stay at least rich, demand at the top end of the market has accounted for a growing proportion of charter activity (rising from 23 percent in 2008 to 29 percent this year).

Among the most popular models in Europe in 2011 so far have been the Embraer Legacy 600 and the Bombardier Challenger 604, 605 and 300. The Cessna Citation XLS has also been in demand and, bucking the anti-light-jet trend, also the Citation Mustang. “So, even though 60 percent of charter flights booked in Europe through Avinode are of only one to two hours duration and carry one to three passengers, Europe has tended toward larger and newer aircraft, while the U.S. has gone for smaller, older aircraft,” said Henriksson.

Generally, the Avinode database is full of paradoxes. In Europe, the average distance flown per trip has reduced, resulting in more price-conscious charter buyers. “Even though prices have increased, by doing shorter trips the overall revenue [for operators] is reduced,” said Henriksson. “On the U.S. side there is a trend toward charter buyers doing both longer trips in smaller aircraft and shorter trips in larger aircraft.”o